STATE OF NEW JERSEY
220th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2022 SESSION
Sponsored by:
Assemblyman P. CHRISTOPHER TULLY
District 38 (Bergen and Passaic)
Assemblywoman BRITNEE N. TIMBERLAKE
District 34 (Essex and Passaic)
Co-Sponsored by:
Assemblywomen Swain, Lopez, Mosquera, Assemblymen Mukherji and Freiman
SYNOPSIS
Provides temporary exemption under sales and use tax for winterizing certain small business operations.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act providing a temporary exemption under the sales and use tax for winterizing certain small business operations.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Receipts from sales of materials, supplies, or services made to a small business for exclusive use in winterizing the small business, including improving, altering, or repairing real property of the small business, shall be exempt from the tax imposed pursuant to the “Sales and Use Tax Act,” P.L.1966, c.30 (C.54:32B-1 et seq.), for the duration of the exemption period.
b. In order to claim the exemption provided pursuant to this section, a small business shall file an exemption application with the Director of the Division of Taxation in the Department of the Treasury within 60 days after the date of enactment of P.L. , c. (C. ) (pending before the legislature as this bill). A small business shall only be allowed to file one exemption application with the director.
c. The exemption application shall include a list of purchases made by or services rendered to the small business that qualify for the exemption, the price of each item listed on the application, the date each purchase was made or service was rendered, and a declaration by the small business that the items listed for which an exemption was applied were exclusively used in winterizing the small business for outdoor operations. The director may require a small business to submit such documentation, records, receipts, or other information as deemed necessary to verify that the small business applying for the exemption meets the criteria set forth to claim the exemption and is a small business.
d. If a small business willfully and knowingly falsifies any document, record, receipt, or other information required by the director to claim the exemption provided pursuant to this section, that small business shall be subject to a penalty of $100 for a first offense and $200 for each subsequent offense thereafter.
e. If the director determines that a small business is entitled to an exemption after successfully submitting an exemption application, the small business shall be entitled to a refund equal to the amount of sales tax paid for each item purchased or service rendered that qualifies pursuant to this section. The refund shall be paid to the small business within 45 days of the submission of an exemption application.
f. As used in this section:
“Exemption period” means the period of time starting on September 1, 2020 and ending on March 31, 2021.
“Small business” means any business that is independently owned and operated and employs fewer than 20 full-time employees.
“Winterizing the small business” means any items purchased or services rendered to a small business for the exclusive use or purpose of conducting normal customer-facing operations, which are customarily provided indoors, outdoors during the fall and winter seasons due to the COVID-19 pandemic, including, but not limited to, the purchase of products to melt or remove snow and ice, tents, and space heaters.
2. This act shall take effect immediately.
STATEMENT
This bill provides a sales and use tax exemption for purchases made by a small business during a brief period of time when purchases enabled the business to conduct its normal indoor operations outdoors. The bill targets relief to small businesses that incurred costs for having to establish or expand outdoor operations during the fall and winter seasons due to the COVID-19 pandemic. A small business is to be entitled to a refund equal to the amount of sales tax paid for each qualified item purchased or service rendered.
Under the bill, a small business that employs fewer than 20 full-time employees, is eligible to apply for a sales and use tax exemption for purchases made or services rendered to winterize the business, for purchases or services made or rendered between September 1, 2020 and March 31, 2021. In order to claim the exemption, the business must file its application within 60 days of the enactment of this bill. The exemption applies to items purchased or services rendered to a small business that enabled the business to conduct business outdoors during the fall and winter seasons due to the COVID-19 pandemic. This exemption covers purchases of products to melt or remove snow and ice, as well as tents, and space heaters.